Non-Fungible Tokens: Louise Carron of the Center for Art Law On The 5 Things You Need To Know To Create a Highly Successful Career In The NFT Industry

Stay authentic. The NFT market is highly competitive, there are thousands of artists looking to make it. It might look easy to mirror what others are doing, but if you work in a more “traditional” medium, you could create pieces that complement an already existing body of work rather than jumping into a whole new category. You could start small: mint a piece that you’ve already created, play with media, create some hype, see how far it goes.

Many have observed that we are at the cusp of an NFT boom. The thing is, it’s so cutting edge, that many people don’t know what it is. What exactly is an NFT and how can one create a lucrative career out of selling them? To address this, as a part of our interview series called “5 Things You Need To Know To Create a Highly Successful Career In The NFT Industry”, we had the pleasure of interviewing Louise Carron.

Louise Carron is an attorney, artists’ rights advocate, and Executive Director of the Center for Art Law, a New York nonprofit at the intersection of art and law. She advises creative entrepreneurs on contract matters, copyright use, and business law, she teaches workshops on legal basics for visual artists, and she is passionate about street art and crypto art.

She was born in Paris, France, where she studied French law and common law and completed a Master’s degree in Comparative Business Law before earning a second Master’s of Law from the Benjamin N. Cardozo School of Law (NY) in 2018.

The information contained herein is for educational purposes only and does not constitute legal advice.

Thank you so much for doing this with us! Before we dig in, our readers would like to get to know you a bit. Can you tell us a bit about your backstory and how you grew up?

Absolutely, thank you for this opportunity!

I grew up in Paris, France, in an environment that really fostered creativity and curiosity for the arts. For reasons that I cannot even begin to explain, I had a metaphysical fascination with New York and naturally gravitated towards a legal career that would allow me to move there and work with artists. I ended up pursuing a double bachelor’s degree in French law and common law in Paris and arrived in New York in the Summer of 2017 with a full scholarship to get a master’s degree and to finally start practicing what I was (and still am) most passionate about: art law.

In the course of one year, I finished two degrees, wrote a thesis, passed the New York Bar, and became the Executive Director of the Center for Art Law. Since then, I have been running daily operations, coordinating educational programming for artists, attorneys, art administrators, and everyone in between, and training students interested in a career in art law. And now, even amidst a global pandemic, I would not leave this city and this community for the world.

Is there a particular book, film, or podcast that made a significant impact on you? Can you share a story or explain why it resonated with you so much?

Patti Smith’s Just Kids was extremely impactful. It was a present from my sister and it spoke to everything that I love and believe in: New York, photography, the 1970s, the desire to leave a meaningful legacy on the world as a young kid full of hope, and facing obstacles head-on.

Is there a particular story that inspired you to pursue a career in this new industry? We’d love to hear it.

A story that particularly inspired me to pursue a career in art law was the tremendous efforts undertaken by two dozen artists in preventing the destruction of pieces they had spent twenty years creating and curating at what became known as 5Pointz, the “Graffiti Mecca” of Long Island City. Overnight, without warning, and blatantly disobeying the court’s orders, the site was whitewashed by the owner of the building. The dispute started around the same time as my law studies and it took about eight years and $6.75 million in damages to the artists for the case to be resolved. This convinced me to advocate for artists by defending their rights, creations, and legacies and I wrote my Master’s thesis comparing the French and US legal approach to street art and graffiti.

Can you share the most interesting story that happened to you since you began this fascinating career?

How do I pick only one story? One thing that I am really proud to have been a part of is the Center’s first art auction in 2019. Without really knowing what we were getting ourselves into, we decided to host a benefit fundraiser and to ask artists and friends in our community to offer artworks. In the span of six months, we managed to turn ourselves into curators, to collect and store three dozen artworks, to create a catalogue and an online auction, to host a reception, and to single handedly ship over pieces across the globe. We decided to make this a staple of the Center’s offerings and in April 2021, we wrapped up our second auction where we shared part of the proceeds with donating artists.

Can you share a story about the funniest mistake you made when you were first starting? Can you tell us what lesson you learned from that?

Something that I find funny is how little understanding or knowledge about nonprofit management and business development I started with and it was certainly not something that I was taught in law school. I used to think that maths or Excel spreadsheets and formulas would never come in handy during my legal career–how wrong I was. In hindsight, learned a lot on the spot through trial and error and grew so much while talking to like-minded people. It made me realize the importance of creating a supportive community around oneself, the necessity to roll up your sleeves when asked, and that there is no better education than experience.

None of us are able to achieve success without some help along the way. Is there a particular person who you are grateful towards who helped get you to where you are? Can you share a story about that?

Besides the support that I received from friends and family who were confused about why I would ever want to leave Paris, I am grateful to Irina Tarsis, the Center’s Founder and Managing Director who took a leap of faith when she invited me to become the Executive Director. She taught me the value of mentorship, which I strive to pay forward for the Center’s interns who are now in the spot where I once was.

Are you working on any exciting new projects now? How do you think that will help people?

In light of the way that the pandemic has impacted visual artists, the Center is working on a number of educational projects, including the creation and expansion of our legal clinics focusing on immigration law and estate and legacy planning.

Ok super. Thank you for all that. Let’s now shift to the main focus of our interview. I’m sure you get this question all the time. But for the benefit of our readers, can you explain in your own words what an NFT is, and why people are spending so much money on them?

I won’t confuse you with another complicated analogy. An NFT is a blockchain-based record representing the ownership and authenticity of a digital asset. Each transaction is recorded in a ledger on the blockchain that points to the asset. NFTs redefine the notion of ownership of digital goods which are technically infinitely reproducible. Anybody might download a certain image from the internet, but NFTs assert who the sole author and owner are.

What attracts people to NFTs is the privilege to own the only “official” version of a digital asset, whether it’s a meme, a video clip of a basketball play, or a cool piece of art. It’s the same thing that motivates people to collect baseball cards or stamps. There is only a finite amount of NFT-backed, or “artist-approved” versions of a digital piece, which confers scarcity to something that could otherwise be infinitely replicated.

The NFT industry seems so exciting right now. What are the 3 things in particular that most excite you about the industry? If you can, please share a story or example for each.

1. I think that NFTs’ use of smart contracts has the potential to revolutionize, automate, and enforce resale royalties for artists. One of the reasons that artists are turning to NFTs is because there is no federal law providing them with the right to receive a share of the sale of their work on the secondary market. Existing in perpetuity, the functions offered by smart contracts could help to alleviate concerns about “art flippers,” those who hold onto artworks just enough for them to turn into a profit.
2. Anybody has the ability to mint and share artworks and there are a lot of great marketplaces in existence, so we are seeing a proliferation of innovative uses of the technology by artists who used to work in more traditional media. For example, Mars House was the “first NFT digital house in the world” and sold for half a million dollars in March.
3. NFTs are starting conversations about what constitutes art and are a phenomenal opportunity for minority artists and those disadvantaged or disenfranchised by the art world to leave a mark without having to find a gallery or an art dealer to represent them. It might even be a tool to redistribute power.

What are the 3 things that concern you about the industry? Can you explain? What can be done to address those concerns?

• As a self-regulated industry, blockchain-based commerce lacks industry-wide standards and best practices. In my research, I have found it very difficult to figure out how each platform operates, or what their fee structure is. The lack of regulation and transparency is something that you might say is very similar to the traditional art market. However, only when regulators properly grasp the benefits of blockchain can the technology be regulated.
• Additionally, there is a general misunderstanding or lack of understanding about the advantages that it could bring to numerous industries. Specifically, the greatest misconception is that blockchain only applies to cryptocurrencies, but the technology provides proof of authenticity that could help industries typically affected by counterfeiting and fraud, such as banking, fashion, art, and even sports.
• Finally, the disastrous environmental impact of mining Ether, a process used by most NFTs, is a great concern. There is hope, as many initiatives are working towards developing and using Proof of Stake, a more energy-efficient method of confirming transactions on a blockchain.

What are the “myths” that you would like to dispel about NFTs? Can you explain what you mean?

When purchasing an NFTs, you do not buy the artwork itself. Rather, NFTs are digital stamps or records of ownership that are secured and authenticated through blockchain technology. Further, buying an NFT does not actually give the right to copy the underlying artwork, which, by default, stays with the artist–as is the case with physical art.

What are the most common mistakes you have seen people make when they enter the NFT industry. What can be done to avoid that?

From an artist’s perspective, the common mistake that I have seen take place before minting their first piece, is failing to do their research and not reading the terms and conditions of the numerous marketplaces that exist. They all operate on varying models and artists should ensure that they are choosing the right service provider, especially since their artwork is going to be there for “perpetuity” (or at least for as long as that platform exists). More generally, artists (and everyone) should not be cheap when it comes to security and tracking assets and transactions.

How do you think NFTs have the potential to help society in the future?

I believe that NFTs can help the art market to become more inclusive of digital art. Museums, auction houses, and art galleries are starting to see this as a new cultural adventure and hopefully will stop turning their noses up at digital and crypto artists.

Ok, fantastic. Here is the main question of our interview. What are your “5 Things You Need To Know To Create a Highly Successful Career In The NFT Industry?” (Please share a story or example for each.)

1. Stay authentic. The NFT market is highly competitive, there are thousands of artists looking to make it. It might look easy to mirror what others are doing, but if you work in a more “traditional” medium, you could create pieces that complement an already existing body of work rather than jumping into a whole new category. You could start small: mint a piece that you’ve already created, play with media, create some hype, see how far it goes.
2. It takes effort to actually “make it”. In this way, NFTs are not that different from the “old” art market. Yes, it’s easy to mint and sell cryptoart without having to rely on an art dealer. However, artists need to take on the same responsibilities that a gallery would undertake, like promoting on social media, creating and cultivating a network, appearing in shows, and being proactive when it comes to finding collectors and collaborators. There are tons of Clubhouse rooms specifically for that purpose, so put yourself out there.
3. Be mindful that copyright law still applies to digital art and crypto art. Buying an NFT does not give the right to reproduce the underlying work, absent an express written agreement between the artist and the buyer. You also cannot steal the work of someone else and mint it without their consent. Just recently, a federal court ruled that Andy Warhol’s unlicensed use of photographs of Prince was infringing on the photographer’s rights. Registering an artwork with the Copyright Office as soon as it is created and getting prior permission to use materials for which you are not the author should be part of everybody’s practice.
4. Leverage smart contract-based resale royalties. While the generally-accepted standard is set at 10% of the sale price, some platforms may allow you to choose the level of resale royalties in perpetuity. However, these schemes are not fool-proof and are often not compatible across platforms, only when the NFT is purchased and resold through the same platform using the same smart contract. So if you mint and sell a piece of crypto art on Nifty Gateway, which is later resold through OpenSea, the royalty won’t come through.
5. Keep track of any sale, transfer, or exchange of NFTs as you would for any exchange of art. The Internal Revenue Service classifies cryptocurrencies (such as Ether) as “property”. If someone purchases an NFT using Ether, then resells the NFT after it acquired value, this is similar to capital gains and creates a “taxable event” that should be recorded on tax returns.

You are a person of great influence. If you could inspire a movement that would bring the most amount of good to the most amount of people, what would that be? You never know what your idea can trigger. :-)

NFTs provide the liberty and opportunity to experiment with multidisciplinary media and it would be a shame if art institutions and other art market participants failed to recognize that. Now is the time for galleries and art fairs to adapt, to transform their models, and to provide more technical and business support to artists, including digital and crypto artists.

We are very blessed that very prominent leaders read this column. Is there a person in the world, or in the US with whom you would like to have a private breakfast or lunch, and why? He or she might just see this if we tag them :-)

Someone who inspires me for many reasons is French photographer JR. In addition to our sharing the same citizenship and birthday, he makes art accessible to the world and local communities through gigantic photographic collages through which he shares the stories of real people, including migrants, inmates, and elders. His immersive “Chronicles” series is absolutely stunning.

Thank you so much for these excellent stories and insights. We wish you continued success on your great work!

My pleasure, thank you for including me in this series!